The Postal Accountability and Enhancement Act of 2006 (PAEA) changed the way the Postal Service sets rates. It divided postal services into two broad categories: market dominant (mailing services) and competitive (shipping services). Market dominant products constitute about 90 percent of postal revenue. They include First-Class Mail, Standard Mail, Periodicals, and some Package Services. Products such as Priority Mail, Express Mail, and bulk Parcel Post are considered competitive. The PAEA placed a cap on price increases for market dominant products.
One small upside to losing 26 percent of mail volume and relaxing delivery service standards over the past decade is that the U.S. Postal Service should experience a significant decline in its costs as well. Except that hasn’t happened for transportation costs.
In fact, Postal Service...Read More